Threading Transparency: Navigating Textile Traceability in the EU

Intertek Softlines and Hardlines Edition 1

This episode of Assurance in Action explores the critical role of traceability in textiles, highlighting the impact of sustainability and regulatory demands. It reviews essential EU regulations and offers practical strategies for implementing effective traceability systems. Challenges such as complex supply chains and ensuring data accuracy are discussed. The episode emphasizes that traceability not only aids in compliance but also enhances trust and brand reputation through increased transparency.

Key Insights:

• Importance of traceability in ethical sourcing and compliance.
• Overview of key EU regulations.
• Practical strategies for effective traceability.
• Challenges in implementing traceability systems.
• Building trust and enhancing brand reputation through transparency.

Host: Alisha Nanda, Senior Manager Global Marketing
Expert: Handan Milewski, Senior Director Global Retailer Management Southern & Central Europe • Commercial Sales

To learn more about our services, visit our website! Intertek x Trace For Good

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Transcript

Host: Hello, everyone, and welcome to Intertek’s Assurance in Action Podcast series, The Softlines and Hardlines edition! You’re here with your host, Alisha Nanda, where we dive deep into the latest trends and updates in Softlines and Hardlines—covering everything from fashion and furnishings to toys and more. We explore these topics through the lens of sustainability, testing, assurance, and certifications 

Today, along with our expert, we’re exploring the critical topic of traceability in textiles—an area that has gained tremendous importance thanks to the many regulations that touch upon this topic especially in the EU. With the help of our expert, we’ll uncover how traceability impacts the industry and what you need to know to ensure transparency and compliance in your supply chain. 

So, without further ado, let's welcome our expert, Handan. Handan, thank you so much for joining us today! 

Handan has worked in the TIC sector for over 10 years, with specialized experience in the textile industry. Within her role, she provides customer and regulatory support in the European region for their strategic projects worldwide.  

Host: Let‘s start things off, Handan, could you explain the significance of traceability in textiles, and why it has become such a crucial focus in the industry? 

Handan: Thanks for a great introduction Alisha. Increasing focus on sustainability and ethical practices, consumer demand for transparency, stricter regulations globally are the main reasons for the focus on traceability. Traceability is the enabler actually, starting point for addressing most of the sustainability needs. Let me give some examples:      

It allows companies to verify the sources of raw materials, ensuring they are sustainably sourced and ethically produced.  

It also helps build trust by allowing consumers to verify claims about the origins of materials, production methods, and the environmental impact of the products they purchase. 

As said, governments and international bodies are imposing stricter regulations on the textile industry, requiring proof of sustainable and ethical practices. Traceability helps companies comply with these regulations, avoiding legal penalties and maintaining access to key markets. 

Other than these important reasons, we should not forget as well the help of traceability on risk management, circular economy initiatives 

It provides brands with better control over their supply chains, helping to identify and mitigate risks, such as the use of harmful chemicals or the inclusion of non-compliant materials. This reduces the likelihood of recalls, reputational damage, and financial loss. 

As the industry moves towards circular economy models, traceability is essential for tracking the lifecycle of products, from raw material extraction to end-of-life recycling. This enables more efficient reuse of materials and supports the creation of closed-loop systems. 

Finally, brands that can demonstrate robust traceability are often viewed more favorably by consumers, investors, and partners. This can enhance brand reputation, differentiate products in the marketplace, and ultimately drive business growth.
 

Host: What are some of the major traceability-related regulatory changes that businesses in the textiles need to be aware of in 2024 and beyond?  

Handan: As said earlier, regulations are getting stricter everywhere both on products and supply chains and corporations to move forward for a more sustainable world. For sure we cannot list all of them but let me highlight some which are closely related to traceability for EU: 

• EU Digital Product Passport: This initiative mandates that textile products sold in the EU carry digital documentation detailing the product's material composition, environmental impact, and supply chain information, enabling better consumer information and supporting recycling efforts. 
• EU Corporate Sustainability Due Diligence Directive (CSDDD): Requires large companies operating in the EU to conduct due diligence on their supply chains, including identifying and addressing human rights and environmental risks.  
• EU Green Claims Directive: The EU is tightening regulations around environmental claims made by businesses. The directive requires that any "green" or sustainability claims made about products be substantiated by traceable and verifiable data, preventing misleading advertising and greenwashing. 
• Extended Producer Responsibility (EPR) Schemes: Countries like France and Germany are implementing or enhancing EPR schemes, which hold textile producers accountable for the entire lifecycle of their products, including end-of-life management.  

These are the key I will highlight today. There are many more, but these are the key. 


Host: How can companies effectively implement traceability systems within their supply chains, and what are the key challenges they might face?  

Handan: Given the complexity and diversity of the supply chains, it is crucial to digitalize the traceability for sure. Companies should work with tech solutions for implementing data management systems to track and record every step of their supply chain. These technologies offer transparency and provide a secure way to trace materials from origin to product. It is important to compare the existing solutions and choose the most appropriate, the most performant one because there are many available in the market.   

• Another crucial point is the engagement with the suppliers: Building strong relationships and working closely with suppliers is essential for successful traceability. They need to understand and what you are trying to initiate.  
• Other points which are important without much details today:  
• Standardization of Data Collection: Implementing standardized methods for data collection across the supply chain ensures consistency and reliability of information.  
• Using Third-Party Verification: Employing third-party auditors or certification bodies to verify traceability claims can enhance credibility and ensure compliance with regulatory requirements. This can also help mitigate risks associated with inaccurate or misleading data. 
• Piloting Programs and then Scaling: Start with small-scale pilot programs to test traceability solutions before full-scale implementation. This allows companies to identify potential issues, refine processes, and scale the system effectively across the entire supply chain. 

When it comes to key challenges, of course it’s not easy. The supply chains are so complicated. These are some of the challenges the companies might face, what we see from our own customers, by our own experience, from our own platform Trace for Good – our partner.  

• Complex and Fragmented Supply Chains: Tracing materials across multiple suppliers and regions, especially in lower tiers. This is one thing.  
• Data Accuracy and Integrity: We have talked about this earlier and how third party verification is important. So they need to make sure the data is accurant and integrity is important here. The third case will be  
• Supplier Resistance and Compliance: As said earlier, you need to make sure your suppliers understand what you are trying to do and you need to make the test easy for them.  
• Regulatory and Industry Variability: There are so many regulations and they are changing very quickly and our customers are in different markets and they need to comply with different regulations at the same time which keep changing.  

These are the most important challenges that we see today.  

Host: What practical advice would you offer to businesses looking to stay ahead of traceability regulations and ensure they meet compliance standards?  

Handan: We hear from our customers night and day, what we hear from our partner Trace For Good, I can share some practical advice here but am sure people are already working towards it.  

What I would say is -  

• Stay Informed and Proactive: Regulations are changing all the time. With your partners stay informed, ask them is there are any changes in the regulations. Regularly monitor emerging regulations and industry standards related to traceability. Engage with industry groups, legal advisors, and compliance experts with Intertek ofcourse, that is extremely important.  
• Invest in Robust Technology as we discussed earlier: Adopt advanced traceability technologies  to create a reliable, transparent, and scalable system. These technologies not only enhance traceability but also provide the flexibility needed to adapt to evolving regulations. For eg. - Our partner Trace for Good is offering an industrial scale, recursive traceability solution with very high supplier engagement rates for instance. They are connected with many open sources and LCA tools which make them a very agile solution . We at Intertek are working exclusively with Trace for Good and helping all our customers to sort out the traceability in their supply chains.  
• Foster Supplier Collaboration and Transparency: Build strong, collaborative relationships with all suppliers, emphasizing the importance of transparency and compliance. It’s extremely important, we are talking about it for the third time.  
• Develop a Comprehensive Traceability Strategy: It’s not just for today, you may be compliant with AGEC law which is a step up and step in but you need to have a strategy to step up and do more. Create a detailed, company-wide traceability plan that aligns with both current and anticipated regulations. 
• Conduct Regular Compliance Audits: Implement routine internal and external audits to assess the effectiveness of your traceability systems and ensure they meet regulatory requirements.  
• Engage in Industry Collaboration and Certification: Participate in industry initiatives, certifications, and collaborations that promote traceability and compliance. It’s always interesting to be ahead of these regulatory associations so that you can move forward very quickly in your own traceability journey.  

Host: Absolutely Handan, those were all great points that everyone in the textile industry should know. And there you have it—a deep dive into the world of traceability in textiles and toys. A special thank you to our expert, Handan, for sharing her invaluable insights and expertise. 

If you found today’s episode valuable, don’t forget to like, share, and subscribe to Softlines and Hardlines for more insights on how testing, assurance, and sustainability are shaping industries across the globe. 

Remember, traceability is not just a compliance requirement; it’s an opportunity to build trust, enhance transparency, and elevate your brand. We’ll be back soon with another episode, so stay curious, stay assured, and stay tuned for more!